Lucky Strike Entertainment Corporation · NYSE:LUCK
Lucky Strike Entertainment — Isos Acquisition — SPAC Merger (September 2021)
37 slides from Lucky Strike Entertainment's SPAC merger presentation, Sep 21, 2021
Slide 1: Discussion Materials September 2021
Discussion Materials September 2021
Slide 2: Disclaimer
D is c lai m e r 2 This presentation (this “Presentation”) has been prepared to assist interested parties in making their own evaluation with respect to a potential business combination between Bowlero Corp . (“Bowlero”) and Isos Acquisition Corporation (“ISOS”) and related potential investment in I
Slide 3: Disclaimer (cont'd)
D is c lai m e r ( c o nt ’ d ) 3 Forecast and Illustrative Scenarios This Presentation contains information with respect to Bowlero’s projected results . This forecast is based on currently available information and Bowlero’s estimates . Bowlero’s independent auditors have not audited, reviewed, co
Slide 4: Our Journey
1938 The original Bowlmor Lan e s o pens its doors in Greenwich Villag e , NYC 1997 Tom Shannon acquires and sets out to revolutionize B o w lmor Lan es into an upgraded bowling experience 2013 B o w lmor Lan es acquires AMF Bowling and creates Bowlmor AMF 2014 B o w lmor A M F acq u ir e s the Brun
Slide 5: The Bowlero Ecosystem
The Bowlero Ecosystem Powerful and reinforcing growth flywheel 5 LEISURE The largest owner and operator of bowling centers in the world MEDIA Ownership of PBA creates strong brand equity and prestige amongst bowlers, which maximizes standalone profitability and drives traffic and spend in the center
Slide 6: Bowlero at a glance
Bowlero at a glance Note: February 2020 TTM run - rate is presented on a pro forma basis including adjustments by account and location to reflect adjusted EBITDA consistent with the definition in the Credit Agreement. See Appendix for definition of Adjusted EBITDA, which is a non - GAAP measure, and
Slide 7: World's largest owner / operator of bowling centers
15 14 13 ~3,5 0 0 M A RKET L A N D S C A PE (# of centers) ~7x n e xt lar g e s t operator 44 322 1 Independent centers 7 Source: Company websites and management estimates 1 Location count, includes current, in development and under LOI World's largest owner / operator of bowling centers Industry fr
Slide 8: Portfolio of assets in highly attractive markets
x Well positioned in highly attractive markets across North America – 310 centers currently operating (302 in the U.S., 6 in Mexico and 2 in Canada) – 3 additional new build centers in development – 9 additional centers signed or under LOI x 74%+ of revenue generated in or adjacent to top 25 MSAs x
Slide 9: Balanced, growing and recurring revenue streams
9 Balanced, growing and recurring revenue streams Considerable guest recurrence at events, especially during the holiday season Consistent revenue stream with huge upside potential Walk - in / recreational bowlers including families, millennials, “date nighters”, and weekend enthusiasts Largest and
Slide 10: Track record of strong, consistent organic growth
10 Track record of strong, consistent organic growth QUARTERLY SSS GROWTH 4 . 9% 2016 - 2019 average 4.1% 6.8% 5.7% 7 .0% 2.9% 2.2% 4.1% 4.4% 3.8% 8.0% 9.6% 4.4% 7 .9% 2.8% ( 0.3 %) 4.5% 2 0 1 8 2 0 1 9 2 01 6 2 0 1 7 Note: Values represent quarterly same store sales
Slide 11: Strong organic performance enhanced by new locations
11 Our strong organic performance is enhanced by our new locations TX MT CA ID NV AZ OR IL NM CO WY MN SD IA ND UT KS NE WA WI OK MI MO NY FL IN AL GA AR LA NC VA TN KY OH MS ME SC MI WV VT NH PA MD NJ DE MA CT RI PA MD VA FL # of N e t cash EBITDA multiple paid 1 – Year ( $ M M) c e n t e r s inves
Slide 12: Attractive center level EBITDAR / EBITDA margin
12 Attractive Center level EBITDAR / EBITDA margin driven by significant operational leverage CENTER LEVEL EBITDAR CENTER LEVEL EBITDA Note: $ in millions; FY as of 6/30 $250 $259 $278 $310 $365 FY '16 A FY '17 A FY '18 A FY '19 A Feb '20 TT M r u n - ra t e % margin 43% 44% 45% 47% 47% $183 $189 $2
Slide 13: Top tier profitability and cash flow conversion
Note: Bars in chart represent average of peer set as of LTM period 12/31/2019 or closest aligned FY LTM period 1 EBITDA includes the impact of run - rate and other adjustments 2 Capex net of SLB proceeds and tenant allowances 3 Average of maintenance capex from FY2016 - 2019 29% 20% 1 6% 11% TOP TIE
Slide 14: Highly attractive returns on invested capital
14 Highly attractive returns on invested capital 3 7% BOWLERO’S STRONG TRACK RECORD OF ROI FY2014 - FY2019 66% 3 1% Bowlmor / Bowlero conversions 1 New games & Amusements New centers Note: Based on financial information through week end September 30, 2019 and pro forma run rate estimates 1 Renovatio
Slide 15: Highly attractive returns on invested capital (cont'd)
15 Source: Company financials Highly attractive returns on invested capital (cont’d) Illustrative case studies JU PI T ER, F L ORI D A Former independent center acquired via new lease with owner Pre - acquisition performance of $2.4mm revenue, $600k in EBITDAR and ($152k) EBITDA net of post - acquis
Slide 16: Opportunity to accelerate organic growth through center upgrades
16 Significant opportunity to accelerate already robust organic growth through center upgrades SAME STORE REVENUE CAGR FY2014 – Feb 2020 SAME STORE EBITDA CAGR FY2014 – Feb 2020 4% 7% 2% Total portfolio Converted centers Low investment centers 9% 11% 7% Total portfolio Converted centers Low investme
Slide 17: Revenue production well ahead of pre-pandemic performance
Revenue production well ahead of pre - pandemic performance 17 Note: Performance compared to same period 2019 1 As of September 12, 2021 Grow by revenue stream vs. 2019 April May June July August September to date 1 Retail Bowling 1% 12% 20% 26% 25% 54% League Bowling (43%) (20%) (15%) (8%) (12%) (3
Slide 18: Strong and improving center-level economics
Strong and improving center - level economics Note: FY as of 6/30. See Appendix for reconciliation of EBITDAR, which is a non - GAAP measure 18 Q4 ($MM) ' 2 1 A ' 2 1 E ‘ 1 9A Bowling & shoe $80 $62 $80 Food & Beverage 53 42 53 Amusement 15 10 12 Ot he r 7 3 7 Total Center Revenue $155 $117 $151 Tot
Slide 19: Q4 FY'21 EBITDA 82% greater than pre-COVID quarter
$ 2 4 $43 Q4 '19A Q4 '21A Q4 FY’21 EBITDA was 82% greater than the comparable pre - COVID quarter 19 REALIZED EBITDA 1 ($MM) x Realized EBITDA 1 in Q4 '21 exceeded Q4 '19 by nearly $20mm or 82% x Retail Bowling & Shoe and Amusements revenues were 11% and 29% higher than pre - pandemic levels, respec
Slide 20: Outperformed FY2021 guidance
20 Significantly outperformed FY2021 guidance due to recovery in businesses and accelerating operational efficiencies REVENUE ($MM) ADJUSTED EBITDA 1 ($MM) Note: FY as of 6/30 1 EBITDA as defined by credit agreement. See Appendix for definition of Adjusted EBITDA, which is a non - GAAP measure, and
Slide 21: Increasing CY2022E Adjusted EBITDA guidance
$34 $19 $16 $8 $4 $3 $10 $2 0 1 $2 85 Feb '20 TTM run - rate Adjusted EBITDA 1 Base business New builds 2 Center a c q u i s i t i o ns Bowl America Media business acquisition G&A CY2022E Adjusted EBI T DA 1 Given base business outperformance, we are increasing CY2022E Adjusted EBITDA 1 guidance by
Slide 22: Strong cash generation strengthened financial position
($ ‘000s) Three months ending June 27, 2021 Twelve months ending June 27, 2021 Cash balances, beginning of period $166,569 $140,705 Operating activities, net 1 54,364 84,532 Business Interruption Insurance Proceeds - 20,187 Investing activities, net (18,488) (46,676) Financing activities, net (2,035
Slide 23: Consolidated long term growth forecast
FY '18A FY '19A Feb '20 FY '20A FY '21A FY '22E TT M r u n - rate $955 $878 $910 $817 $746 $666 $614 $518 $386 CY '22E FY '23E CY '23E 23 Consolidated long term growth forecast R E V EN U E COVID impacted period Recovered business A D JU S T E D E B IT D A UNLEVERED FREE CASH FLOW 1 Note: $ in milli
Slide 24: Global expansion represents a significant opportunity
24 Global expansion represents a significant opportunity to further accelerate growth Bowlero’s powerful brands are primed for monetization Global expansion through international licensing provides opportunity for stable, high - margin revenues Bowling is a fast - growing sport internationally and h
Slide 25: Fast growing PBA diversifies business model
F as t g r o wi n g PB A d i v e r si f i e s a n d r e i n f o r c e s b usi n e s s mo de l Premier Sponsors Over 70 hours / year of original first - run linear programming $3mm+ dollar media rights contract with Fox Sports $550k+ in additional media rights fees from CBS Sports Network and OTT pla
Slide 26: Innovation in sports betting and digital gaming
Innovation in sports betting and digital gaming to elevate in - center experience and drive upside Partnered with Bettorview, a digital signage solution with the ability to enhance in - venue promotions on screens Monetize the legal online sports betting industry via performance - based agreements w
Slide 27: Proven, proprietary technology drives operational improvement
Proven, proprietary technology drives continuous operational improvement QMS enables businesses to consistently access available operating leverage and drive better, more predictable performance 27 Management SaaS platform powered by a multilayered algorithm Developed in - house to optimize the mana
Slide 28: Overview
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Slide 29: Transaction summary
Transaction summary 29 Source: Bowlero management; Public filings Note: Assumes no new debt issuance; Cash to company balance sheet includes preferred equity paydown of $139mm and remaining balance for debt paydown or cash to balance sheet; Assumes current net debt of $735mm (excluding preferred); S
Slide 30: Overview of ISOS Acquisition Corp
O v e r v i e w o f I S O S A c q u isi t i o n C o r p Summary of ISOS IPO Backed by leading institutional investors Premier institutional support A n c h or inv e s t ors Underwriters (Fully committed FPA) IPO date: March 3 rd , 2021 O f f erin g s i z e: $255mm, including over - allotment • Upsiz
Slide 31: ISOS team overview
ISOS team overview 31 George Barrios Co - CEO ▪ Award winning C - suite executive with proven track record of creating shareholder value in public markets ▪ Named Top 3 Media CFO by Institutional Investor in 2017 Michelle Wilson Co - CEO ▪ Forbes’ and Sports Illustrated’s 10 Most Influential and Pow
Slide 32: Investment thesis
32 Investment thesis Bowlero: A premium consumer experience with opportunity for significant value creation Industry leader in massive addressable market of $11bn 1 for bowling and $100bn+ 2 for out - of - home entertainment Highly profitable business model with industry leading operating metrics Mu
Slide 33: Appendix
Appendix
Slide 34: Non-GAAP Reconciliations
Non - GAAP Reconciliations Note: $ in millions; FY as of 6/30 1 The closed center adjustment is to remove EBITDA for closed centers. Closed centers are those centers that are closed for a variety of reasons, including permanent closure, newly acquired or built centers prior to opening, centers close
Slide 35: Non-GAAP Reconciliations (Cont'd)
Non - GAAP Reconciliations (Cont’d) Note: $ in millions; FY as of 6/30 1 The closed center adjustment is to remove EBITDA for closed centers. Closed centers are those centers that are closed for a variety of reasons, including permanent closure, newly acquired or built centers prior to opening, cent
Slide 36: Non-GAAP Reconciliations (Cont'd)
Non - GAAP Reconciliations (Cont’d) 36 ($ ‘000s) Three months ending June 27, 2021 Twelve months ending June 27, 2021 Net cash provided by operating activities $41,091 $58,232 Business Interruption Insurance proceeds 0 (20,187) Interest on debt 13,317 46,460 Effect of exchange rates on cash 44 27 Op
Slide 37: Thank You
T H A N K Y O U